Troubled Leeds Grand Theatre to receive £653,000 bailout

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Leeds council is stepping in to bail out the city’s troubled Grand theatre to the tune of £653,000, in the wake of major funding problems and a continuing investigation into alleged fraud at the famed institution.

Council bosses are also set to re-examine the governance arrangements, and set an emergency plan in place, to save one of the city’s cultural jewels from potential ruin, something they admit could happen because of a large deficit which has been compounded by - as yet unproven - allegations of misappropriation of funds.

The YEP revealed earlier this year that the theatre, which dates from 1878, was at the centre of a six-figure fraud probe.

Three people have been arrested in connection with the investigation, and they remain on bail pending further inquiries.

The allegations relate to claims that bogus invoices were used to make payments to non-existent private companies. The money involved is thought to be up to £100,000.

A report just presented to the council’s cabinet says that the authority’s “earmarked reserves” for the coming financial year will include £653,000 to “support the Grand Theatre in respect of both the projected deficit for 2013/14 and other potential losses arising from the reclaiming of alleged misappropriated funds”.

“The company has no unrestricted reserves to fund its deficit and therefore will require the support of the council to continue to operate,” the report says.

“The financial position of the company is of significant concern.”

Addressing a council cabinet meeting, opposition Conservative group leader Coun Andrew Carter said the situation for the theatre was “very disturbing” and added it was “high time we had a plan in place to serve the long term viable future of the Grand Theatre”.

“We cannot go on reporting those sorts of deficit figures,” he said.

“It’s a well liked and well used institution and we all want to see its future secured.”

Council leader Coun Keith Wakefield said it was clear that “we cannot accept the current governance arrangements”.

He stressed the Grand is a “jewel” in the city’s crown, but added that: “The way the governance has evolved, we cannot afford to run this institution in the same way.

“Things will have to change in the way that it is run in order to secure its future.”

Coun Carter added after the meeting: “I absolutely want to see the long term future of the Grand ensured.

“It’s a major asset to the city.

“But what’s quite clear is that there needs to be a completely new structure of operation. We cannot leave it to the board of the Grand, which is appointed by the city council.

“Council taxpayers are going to have to bridge this deficit, and things have been compounded by the allegations.

“The poor old taxpayer must find £653,000 and as custodians of the public purse, this has got to be sorted [by the council].”

A further report to July’s cabinet meeting is expected to lay out further details of the proposed new governance arrangements.